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November 2014 Midterm Election Wrap-Up

November 6, 2014

As the ballot dust settles from Tuesday’s election, the mixed bag of results delivered by voters at both the state and national level made for some surprising shake-ups that not even the most seasoned political insider anticipated.

Democrats once again swept the state’s highest constitutional offices with Gov. Jerry Brown leading the pack and garnering his fourth and final term with nearly 60 percent of the vote. While Democrats enjoyed victories at the statewide level, legislative Democrats were unable to retain their prized supermajority with Republicans capturing critical seats. With the last votes still to be tallied, Democrats appear three votes shy of the required supermajority thresholds in both the Assembly, which requires 54 votes, and the Senate, which requires 27 votes.

Voters also approved a trio of ballot measures authorizing $7.1 billion in bond funding for water infrastructure upgrades (Proposition 1); implementing changes to how the state manages its finances in preparation for the next economic downturn (Prop. 2); and reducing certain felony offenses to simple misdemeanors in hopes of easing prison overcrowding and reducing the number of specified nonviolent offender arrested and incarcerated (Prop. 47). Soundly rejected, however, Prop. 46, which would have cost local government millions by increasing the current cap on medical malpractice damages. Another healthcare related measure, Prop. 45, would have granted the Insurance Commissioner enhanced power to reject/approve healthcare insurance rates was denied by voters.

On the national level, Republicans seized control of the Senate, securing at least 52 seats with races in Virginia, Alaska and Louisiana still undecided. The GOP added to its majority in the House, picking up 14 Democratic seats while losing just one. With 17 races outstanding on election night, Republicans held 243 seats and will enjoy their largest majority since 1928. Republicans will now also count at least 31 governors among their ranks — success which may be particularly important for the party’s agenda with the potential for federal gridlock.

Although some races remain too close to call and may not be final for days, Republicans, both in California and on the national front, gained political ground. The key question now pending in Sacramento and Washington is how will each party embrace their newly defined roles in the coming legislative session?

Leading up to Tuesday’s elections, Democrats remained hopeful they would win enough seats to recapture the supermajority. However, unanticipated upsets resulted in Democrats turning over four Assembly seats and one Senate seat to Republicans. Absent any developments resulting in vacant Assembly seats, it seems rather unlikely that Democrats will recapture the supermajority in the lower house. Senate Democrats could potentially take back the supermajority should they secure three of the four vacant seats created by Senators Mark DeSaulnier (D-Concord), Mimi Walters (R-Laguna Niguel) and Steve Knight (R-Lancaster) ascension to Congress and the resignation of Senator Rod Wright (D-Ingelwood). Governor Brown has called a special election for Dec. 9 to fill the seat left vacant by Sen. Rod Wright and is expected to call three more in the next few weeks.

Whatever the final outcome, this election cycle completes the transition to sweeping changes made to California’s political system over the last few years — primarily the adoption of new district lines and new primary election rules providing for the top two vote-getters, regardless of party, to advance to the general election. The potential to gain the supermajority threshold in either house may largely be attributed to these changes. In particular, the top two system contributed to some of the nastiest and most expensive intra-party battles across the state and could possibly result in one incumbent losing to an opponent of the same party.

Republican Control Alters Congressional Agenda

With Republicans poised to take control of Congress in the next session a number of important items still remain on this “lame duck” Congress’ December to-do list. The continuing budget resolution is due to expire, affecting some 60 tax provisions, the Terrorism Risk Insurance Act and the National Defense Reauthorization Act. Other pending proposals where action is possible include Internet taxation, collecting use tax through the Marketplace Fairness Act and foreign policy issues such as combatting the expansion of the Islamic State.

Among other challenges, the 114th Congress is facing another debt ceiling deadline in March and the expiration of the Highway Trust Fund in May. Debate is also expected over immigration, energy (including the Keystone XL pipeline and energy exploration), the Affordable Care Act, environmental regulations, trade and tax reform in the months ahead.

How these changes in Washington’s political atmosphere will impact state and local governments remains to be seen. The League will continue to monitor the last remaining months of the current Congress and report back to members on any relevant developments. More information regarding the League’s federal priorities and issues is available online.

Election Breakdown

The following is a list reflecting the outcomes of all six ballot measures, 80 Assembly district races, 20-even numbered district races, eight statewide constitutional office races, four Board of Equalization races and a selection of Congressional races.

The Water Quality, Supply, and Infrastructure Improvement Act of 2014 authorizes $7.12 billion in new general obligation bonds and the reallocation of $425 million in existing bond funds previously approved by voters for water related projects that will benefit local communities such as water conservation, groundwater recharge, stormwater capture, and reuse, watershed restoration, water storage and conveyance and water recycling and reuse.

The Rainy Day Budget Stabilization Fund Act requires the State Controller deposit 1.5 percent of general fund (GF) revenues and tax revenues derived from capital gains (to the extent that these revenues are in excess of 8.0 percent of GF revenues) into the Budget Stabilization Account (BSA) and lead to a reserve of 10 percent of GF revenues; any additional contributions above a 10 percent reserve is required to be spent on infrastructure. Prop 2 only allows budget reserve withdrawals or deposit suspension following a gubernatorial finding of a defined “budget emergency.” The measure also provides for the dedication of additional funds to pay previously accrued state debts, payments owed on local mandates, and supplemental payments toward the state’s pension liabilities that will contribute to the improvement of the state’s overall financial footing.

The Insurance Rate Public Justification and Accountability Act would have required rate changes to individual and small-group health insurance plans be justified by the health insurer and submitted to the Insurance Commissioner for approval prior to taking effect. The measure also would prohibit health, auto and home insurance companies from using a person’s credit or prior insurance coverage history to determine eligibility or rates.

The Tory and Alana Pack Patient Safety Act of 2014 would have required increased the current $250,000 cap on noneconomic medical malpractice damages (such as pain and suffering, emotional distress) to an estimated $1.1 million. In addition, the measure required physicians to report suspected drug or alcohol impairment of other physicians; requires hospitals to conduct alcohol and drug testing of physicians; and, requires health care practitioners and pharmacists to consult the Controlled Substance Utilization and Review Evaluation System (CURES) before prescribing or dispensing certain controlled substance that have a high potential for addiction/abuse (such as the opiates hydrocodone and morphine or stimulants like Adderall and Ritalin).

The Safe Neighborhoods and Schools Act re-classifies a host of felony offenses or felony/misdemeanor (“wobbler”) offenses as simple misdemeanors and directs any resulting state savings to support mental health and substance abuse treatment (65 percent), truancy and drop-out prevention (25 percent), and victim services (10 percent).

Under Prop 47, felony crimes such as property crimes involving shoplifting, theft, forgery or fraud are reduced to misdemeanor offenses so long as the value of the property stolen/defrauded does not exceed $950.00. The measure reduces possession of specific narcotics (e.g. including drugs used to facilitate date-rape, and concentrated cannabis), from a felony to a misdemeanor, and imposes new fines and shorter sentences. The measure also authorizes the re-sentencing of individuals convicted of specified crimes, unless the defendant has prior convictions for certain violent or serious crimes Individuals eligible for resentencing consideration would be subject to a criminal history and risk assessment review prior to resentencing

Repeals current law prescribed by AB 277 (Hall, Chapter 51, Statues of 2013) ratifying separate tribal-state gaming compacts entered into between the state of California and North Fork Rancheria Band of Mono Indians and the Wiyot Tribe. The measure would also repeal the California Environmental Quality Act (CEQA) exemptions extended to both tribes under the bill authorizing the building of these off-site reservation casino establishments.

Statewide Assembly Race Results

Note: Candidates with an asterisk (*) are incumbents. NPP is abbreviated for No Party Preference.